This study reveals the different modes of relationships between taxonomic richness and sea levels within cephalopods (ammonoids and nautiloids), and that these trends were significantly correlated to the evolutionary change of hatchling size of cephalopods. The temporal changes of reconstructed hatchling habits during the Phanerozoic demonstrate planktic habits in ammonoids and a trend from planktic to non-planktic habits in nautiloids. The correlation of ammonoid richness with sea levels and the lack of correlation in nautiloids with nonplanktic hatchlings contradict the general theory that animals with planktic embryos or larvae have lower speciation rates and extinction probabilities. This contradiction in the fossil evidence of cephalopods suggests that sympatric speciation was a plausible dominant process of their macroevolution. This contradiction relative to prevalent theory, that allopatric speciation is the prevalent mode of speciation in modern animals, suggests that speciation is a more complicated process than previously thought.